“Very bold or very dumb”: data caps don’t apply to ISP’s own movie service (updated)

Major Canadian ISP Shaw Communications has rolled out a plan to offer …

Update: Shaw provided no information when I contacted them before running this story, but starting this afternoon, the company suddenly started tweeting up a storm. According to the company, watching Movie Club on a television incurs no data cap because it is delivered through Shaw's existing video-on-demand QAM cable infrastructure. When users access Movie Club through a computer, they will access an IP-based version of it delivered over the Internet—and this will affect monthly data caps.

What happened here—miscommunication, change of heart, misspeaking? It's not clear. As Canada's Financial Post noted today, Shaw's president had said on multiple occasions that Internet access to Movie Club would not count against a data cap.

On Thursday, Shaw president Peter Bissonnette told the Calgary Herald that movies streamed using its new service will not count against a subscriber’s monthly Internet data caps, unlike movies streamed from competing outlets such as Netflix Inc., which continue to count against a user’s cap.

In an interview with the Financial Post on Friday, Mr. Bissonnette said “If they [subscribers] choose to go online and view it, it doesn’t contribute toward that [data cap].”

Original story: Canadian cable operator Shaw is one of the country's largest Internet access providers—and it just wrapped up its participation in national hearings on the metered billing and data caps after an angry outcry from the public over the issue. Which made the news about its new CAN$12-per-month "Movie Club" service a bit surprising:

Subscribers to Movie Club—who initially can watch on their TV or computer, with phones and tablets planned to come on line later—can view content without it counting against their data plan.

“There should be some advantage to you being a customer,” [Shaw president Pete] Bissonnette said.

OpenMedia.ca, which defends net neutrality and pushes back against things like usage-based billing, said that Shaw's move was blatantly anticompetitive.

"It’s unfair for Shaw to restrict access to competing services by making them more expensive to use than Shaw’s own services," said executive director Steve Anderson. "It clearly demonstrates that Internet metering isn't about paying for use; it’s about prioritizing Big Telecom’s services in order to hogtie the competition and assert dominance in multiple markets."

US companies like AT&T do something a bit similar, offering IPTV services over the same wire as Internet access but claiming that they are "managed services" exempt from data caps and net neutrality rules. Shaw's product appears to go further, offering computer and smartphone access to the content, which suggests delivery over the "actual" Internet. (We reached out to Shaw for comment but received no response by press time.)

Canadian law professor Michael Geist wrote of the new service, "At a minimum, assuming the service is as described in the article, it would seem that a CRTC complaint is a certainty and the pressure will be on the Commission to demonstrate that the law against undue preference in Canada has some teeth."

Peter Nowak, a Canadian tech journalist and pundit, called out these kinds of bundling tactics back in May, before the Movie Club details had been announced (his concern was tying TV service to higher Internet speeds; you can't get one without the other).

"First, the big ISPs tried throttling, then they tried UBB [usage-based billing]," he wrote. "Neither worked, so now they’re collectively trying to slow Netflix et al with regulation. Unless Canadian regulators are a bunch of loonies (and the jury is out on that), that too won’t work. Tied-selling, where customers have to pay cable companies for video whether they want to or not, may be their final kick at the can."

The new announcement about Movie Club led Nowak to tweet a perfect summary of the story last night: "First Shaw tries to illegally tie internet service to cable, now it's clearly violating net neutrality rules. Either very bold or very dumb."